Question 1

Vertical integration is more likely to be attractive when the end consumer market is

Accepted Answer

A)  volatile. 
B)  stable. 
C)  contracting. 
D)  fragmented. 
A)  volatile. 
B)  stable. 
C)  contracting. 
D)  fragmented.

Question 2

According to BNP Paribas chief economist, Julia Coronado, when businesses feel confident about the future they are more aggressive in looking for ways to grow and expand their operations.You would expect the volume of mergers and acquisitions to ________ during this period.

Accepted Answer

A)  decrease 
B)  remain stagnant 
C)  increase 
D)  fluctuate downward 
A)  decrease 
B)  remain stagnant 
C)  increase 
D)  fluctuate downward

Question 3

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

Accepted Answer

A) True 
 B)False

Question 4

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016. They considered this to be a poor

Accepted Answer

A)  expansion. 
B)  divestiture. 
C)  acquisition. 
D)  cost savings. 
A)  expansion. 
B)  divestiture. 
C)  acquisition. 
D)  cost savings.

Question 5

Which of the following is not a downside of portfolio models used to assist a firm in balancing its portfolio of businesses?

Accepted Answer

A)  Portfolio models compare SBUs on only two dimensions under the assumption that these are the only factors that matter. 
B)  Portfolio models view each SBU as a stand-alone entity. 
C)  Portfolio models rely on loose rules regarding resource allocation across the SBUs. 
D)  The evaluation process risks becoming mechanical and oversimplified. 
A)  Portfolio models compare SBUs on only two dimensions under the assumption that these are the only factors that matter. 
B)  Portfolio models view each SBU as a stand-alone entity. 
C)  Portfolio models rely on loose rules regarding resource allocation across the SBUs. 
D)  The evaluation process risks becoming mechanical and oversimplified.

Question 6

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

Accepted Answer

Feedback: Discuss what businesses a corp

Question 7

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. Thisis an example of creating value by using

Accepted Answer

A)  related diversification to acquire market power by pooling negotiating power. 
B)  related diversification to acquire economies of scope by leveraging core competencies. 
C)  related diversification to acquire market power by integrating vertically. 
D)  related diversification to acquire economies of scope by integrating vertically to acquire market power. 
A)  related diversification to acquire market power by pooling negotiating power. 
B)  related diversification to acquire economies of scope by leveraging core competencies. 
C)  related diversification to acquire market power by integrating vertically. 
D)  related diversification to acquire economies of scope by integrating vertically to acquire market power.

Question 8

Many acquisitions ultimately result in divestiture.

Accepted Answer

A) True 
 B)False

Question 9

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change, therebycreating value within business units.

Accepted Answer

A)  Parenting 
B)  Leveraging core competencies 
C)  Restructuring 
D)  Sharing activities 
A)  Parenting 
B)  Leveraging core competencies 
C)  Restructuring 
D)  Sharing activities

Question 10

When a firm diversifies into ________ businesses, the primary potential benefits to be derived come from ________ relationships where value creation is derived from the corporate office.

Accepted Answer

A)  unrelated; hierarchical 
B)  related; hierarchical 
C)  related; horizontal 
D)  unrelated; horizontal 
A)  unrelated; hierarchical 
B)  related; hierarchical 
C)  related; horizontal 
D)  unrelated; horizontal

Question 11

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

Accepted Answer

A)  strategic alliances. 
B)  vertical integration. 
C)  horizontal integration. 
D)  divestiture. 
A)  strategic alliances. 
B)  vertical integration. 
C)  horizontal integration. 
D)  divestiture.

Question 12

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

Accepted Answer

A)  acquisition. 
B)  divestiture. 
C)  unrelated diversification. 
D)  related diversification. 
A)  acquisition. 
B)  divestiture. 
C)  unrelated diversification. 
D)  related diversification.

Question 13

Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are

Accepted Answer

A)  strategic resources. 
B)  core competencies. 
C)  shared activities. 
D)  economies of scope. 
A)  strategic resources. 
B)  core competencies. 
C)  shared activities. 
D)  economies of scope.

Question 14

________ is an antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price.

Accepted Answer

A)  Greenmail 
B)  A golden parachute 
C)  A poison pill 
D)  Scorched earth 
A)  Greenmail 
B)  A golden parachute 
C)  A poison pill 
D)  Scorched earth

Question 15

Many leading high-tech firms such as Google, Apple, and Intel have dramatically enhanced their revenues, profits, and market values through a wide variety of diversification initiatives. Which of the following is not such an initiative?

Accepted Answer

A)  acquisitions 
B)  strategicalliances 
C)  stockholder enhancement 
D)  joint ventures 
A)  acquisitions 
B)  strategicalliances 
C)  stockholder enhancement 
D)  joint ventures

Question 16

Portfolio management matrices are applied to what level of strategy?

Accepted Answer

A)  departmental level 
B)  business level 
C)  corporate level 
D)  international level 
A)  departmental level 
B)  business level 
C)  corporate level 
D)  international level

Question 17

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

Accepted Answer

Feedback: There are three basic means. F

Question 18

In the BCG Matrix, a ________ is a business that has a low market share in an industry characterized by high market growth.

Accepted Answer

A)  star 
B)  cash cow 
C)  question mark 
D)  dog 
A)  star 
B)  cash cow 
C)  question mark 
D)  dog

Question 19

________ is when a new legal entity is formed by a combination or consolidation of two firms.

Accepted Answer

A)  An acquisition 
B)  A merger 
C)  An unrelated diversification 
D)  A related diversification 
A)  An acquisition 
B)  A merger 
C)  An unrelated diversification 
D)  A related diversification

Question 20

The risks of vertical integration include all the following except

Accepted Answer

A)  costs and expenses associated with increased overhead and capital expenditures. 
B)  lack of control over valuable assets. 
C)  problems associated with unbalanced capacities along the value chain. 
D)  additional administrative costs associated with managing a more complex set of activities. 
A)  costs and expenses associated with increased overhead and capital expenditures. 
B)  lack of control over valuable assets. 
C)  problems associated with unbalanced capacities along the value chain. 
D)  additional administrative costs associated with managing a more complex set of activities.

Vertical integration is more likely to be attractive when the end consumer market is

According to BNP Paribas chief economist, Julia Coronado, when businesses feel confident about the future they are more aggressive in looking for ways to grow and expand their operations.You would expect the volume of mergers and acquisitions to ________ during this period.

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016. They considered this to be a poor

Which of the following is not a downside of portfolio models used to assist a firm in balancing its portfolio of businesses?

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. Thisis an example of creating value by using

Many acquisitions ultimately result in divestiture.

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change, therebycreating value within business units.

When a firm diversifies into businesses, the primary potential benefits to be derived come from relationships where value creation is derived from the corporate office.

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

________ is an antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price.

Many leading high-tech firms such as Google, Apple, and Intel have dramatically enhanced their revenues, profits, and market values through a wide variety of diversification initiatives. Which of the following is not such an initiative?

Portfolio management matrices are applied to what level of strategy?

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

In the BCG Matrix, a ________ is a business that has a low market share in an industry characterized by high market growth.

________ is when a new legal entity is formed by a combination or consolidation of two firms.

The risks of vertical integration include all the following except

Strategic Management Creating Competitive Advantages

Analyzing the External Environment of the Firm Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firm's Intellectual Assets Moving beyond a Firm's Tangible Resources

Business-Level Strategy Creating and Sustaining Competitive Advantages

International Strategy Creating Value in Global Markets

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

Filters

Exam 6: Corporate-Level Strategy Creating Value through Diversification

Vertical integration is more likely to be attractive when the end consumer market is

According to BNP Paribas chief economist, Julia Coronado, when businesses feel confident about the future they are more aggressive in looking for ways to grow and expand their operations.You would expect the volume of mergers and acquisitions to ________ during this period.

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016. They considered this to be a poor

Which of the following is not a downside of portfolio models used to assist a firm in balancing its portfolio of businesses?

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. Thisis an example of creating value by using

Many acquisitions ultimately result in divestiture.

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change, therebycreating value within business units.

When a firm diversifies into ________ businesses, the primary potential benefits to be derived come from ________ relationships where value creation is derived from the corporate office.

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

________ is an antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price.

Many leading high-tech firms such as Google, Apple, and Intel have dramatically enhanced their revenues, profits, and market values through a wide variety of diversification initiatives. Which of the following is not such an initiative?

Portfolio management matrices are applied to what level of strategy?

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

In the BCG Matrix, a ________ is a business that has a low market share in an industry characterized by high market growth.

________ is when a new legal entity is formed by a combination or consolidation of two firms.

The risks of vertical integration include all the following except

Strategic Management Creating Competitive Advantages

Analyzing the External Environment of the Firm Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firm's Intellectual Assets Moving beyond a Firm's Tangible Resources

Business-Level Strategy Creating and Sustaining Competitive Advantages

International Strategy Creating Value in Global Markets

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

Filters

When a firm diversifies into businesses, the primary potential benefits to be derived come from relationships where value creation is derived from the corporate office.